In the previous issue, Cat Boyd argued for a socialism that was anti-capitalist and in ‘favour of economic planning’. While I would agree with this and am generally supportive of RISE, the use of these phrases without sufficient elaboration reveals a continuing lack of a more systematic economic analysis by many on the left. What does economic planning really mean in 2016 (rather than 1945 or 1973)? And while it is a call to arms for the faithful, how can we be anti-capitalist when it comes to talking about how the economy should be organised and run in Scotland when we live under global capitalism?
During my SSP membership, I despaired at the lack of debate on what contemporary alternative economic strategy would look like. Going beyond arguments about socialism in one country, how should we come to terms with globalisation and the failures of older models of socialism? Typically, people’s eyes either glazed over when you brought up the subject, or you were met with the old canards, socialist planning and nationalisation. Occasionally, if pressed about what this would mean practically, you got the answer ‘Of course, we don’t want to nationalise fish and chip shops’.
These remain critical and yet largely unresolved issues. What, under actually existing socialist economies, would be the relationship between: individual/ collective ownership; the private versus public realm; individual liberty versus social equality; collective learning versus individual entrepreneurialism, competition versus collaboration, and markets versus planning. All these are pertinent to any well-functioning economy if it is to sustain itself over time.
Those who have read my recent Reclaiming Public Ownership: Making Space for Economic Democracy (Zed, 2012) will know I share Cat’s desire for more planning of our economy, particularly in the battle against climate change. Of all our privatised utilities, energy proves the folly of faux market solutions to critical public policy issues requiring long-term patient investment and a strategic overview.
I also argue for an economy far more collectively owned than at present, although I advocate a diversified and decentred model of public ownership, which includes cooperatives and far more forms of localised state ownership. Broader public participation – not just of workers but also consumers and those denied, or no longer in, work – is critical for a more radical economic democracy.
We need greater localism, but not at the expense of overall strategic direction and a broader national and internationalist commitment to social and environmental justice. This is why, from a left political economy perspective, I also support staying in the European Union – for all the failings of its current political and business elite.
Turning back to ownership issues, where should the line be drawn between public and private? The most compelling argument for public ownership remains securing the ‘commanding heights’ of the economy. But I’d replace ‘the workers’ with ‘the common good’. The key economic problem is not so much to secure the ‘fruits of their labour’ for workers (although we do need better redistribution of income for the average worker) but to allow the broader public to control the ‘surplus’ produced from the economy, and put it to good use to invest for our collective future both as a country and for the planet.
That means owning the most important strategic sectors of the economy: banking, energy, transport, and arguably greater communal control over land, without resorting to a Soviet-style state appropriation. There are plenty of other areas of life where commodified relations should have no place in decent society: health, education and water being obvious. However, there are other parts of the economy where some forms of market and private ownership should be encouraged on the grounds of efficiency, innovation and democracy.
As I argued in my book, there are three basic flaws with a universal state owned system of economic planning. First, it is logistically impossible to match the market’s ability to identify individual needs in mass consumer sectors. Former professor of Soviet studies, Alex Nove, once calculated that state bureaucrats in the Soviet economy faced the impossible task of planning for 12 million products, before even thinking about the individual needs of consumers in a country of over 200m.
A second and related obstacle to economic planning is the knowledge problem. How can state planners possibly have all the necessary knowledge in a complex economy to make effective decisions? Much important knowledge through which economies function is of the local and tacit variety – decentralised through billions of relationships existing between producers and consumers, local managers and employees and workers themselves. Such critical information and more importantly, the knowledge of what to do with that information, is impossible to centralise.
But the most compelling point is that economies are not static; they are evolutionary and dynamic and, therefore, processes of economic development and knowledge production are ever changing and unpredictable. Central state bureaucrats or even global corporate executives can never be omnipotent. Sadly, these efficiency problems are actually multiplied if autocratic and hierarchical systems of planning are replaced by more genuinely democratic socialist ones. The need to reach agreement on every decision on a democratic and planned basis slows down the wheels of an economic system even further in a dynamic, open and uncertain economic environment, which is why socialist regimes that start off with the best of intentions often end up as totalitarian nightmares.
A functioning, democratic socialist economy in the future will have to be a mixed economy of sorts if it is to evolve, thrive and sustain itself in a way that does not crush individuality and innovation. But how do we move from strong social democracy within capitalism to an economic system that is recognisably socialist? Is the question even worth posing from a practical point of view? And, what should be the core of an anti-capitalist economics that Cat Boyd and others desire?
Given what I have said, we need to disconnect the market institution and even some forms of private ownership from capitalist logics. The more thoughtful progressive economists and market socialists such as Theodore Burczak recognise the usefulness of markets for certain functions in an economy, particularly in identifying consumer wants and needs. For example, we’d presumably want to encourage well-functioning, regulated farmers’ markets while constraining or abolishing more speculative financial and commodity markets that add to global economic instability.
There is also an important discussion to be had about what role competition would have in a socialist society but that is too big a subject to do justice here. Suffice to say that in terms of labour markets, wages can be taken out of competition through collective bargaining, national agreements, minimum wage legislation and so on, but in a global economy there is always the threat of low wage competition elsewhere. This is why the EU and international agreements, for all their current failings, are unavoidable in the creation of any kind of more progressive international economy.
Many problems socialists have with economics are ultimately due to their philosophical underpinnings. While I think utopian visions are important, particularly in setting what American sociologist, Erik Olin Wright, refers to as the ‘socialist compass’, we need to disabuse ourselves of the kind of millenarian thinking where all politics disappears because the basic disagreements and conflicts over economic resources have been forever resolved. This was Marx and Engel’s most serious blind spot, which reflects the limits of their own commitment to Hegelian philosophy and scientific rationality.
Instead, in the actually existing economy of 2016, we should pose the question: what are the worst evils of the contemporary global economy that anti-capitalism wants to eradicate (accepting one can never fully remove the human impulse for one group to try assert its economic power over another)? When the question is put in this way, it becomes obvious, boiling down to two things: the need to challenge the private appropriation of wealth and diminishing conditions of labour.
The appropriate question then becomes what kind of economic institutions are needed to deal with these issues? A citizen’s income is a critical element to the latter – set at a level that allows individuals the positive freedom to choose how they sell their labour. Freedom from economic servitude was always one of Marx’s most important demands. And democratic forms of public ownership are one important way to deal with the increasing capture of common wealth by elites. But we will still need to encourage the right kinds of markets, innovation, entrepreneurialism and even competition, albeit with very different forms of social regulation and economic institutions than currently on offer.
Andrew Cumbers is Professor of Regional Political Economy at the University of Glasgow